30 Minute Chart: XBI
Here is an example of a trade from last week utilizing the Daily Chart. I always check the daily chart when putting together my morning watch list.
Daily Chart (left side) shows XBI in a down trend. Forms a small green up day and then swallowed up the next day with a red engulfing bar. Basically anyone who was long 2 days ago in a panic and looking to bail out.
When I see this pattern (engulfing of a green bar) I anticipate selling the following day to continue. Here the 2nd 30 minute candle set up off of the previous days low for a nice trade.
Trade with the trend - trade what you see not you think.
* You don't have to trade everyday. If the conditions don't feel right or if you're unsure of the current days trading environment then PASS on the trade. Missed money is better than lost money. Day trading and the stock market is not a "war" that you must win at all cost. Trading should be fun, wait for only the good setups. Follow your rules, stick to your stops, and know that everyday the market presents a new chess board.